QuickBooks inventory adjustment is an important function in the program that let people keep track of their inventory efficiently. You can easily view your quantities on hand. The automatic updates of the inventory quantity with every sales or purchase can keep your inventory management accurate, and at the same time, you can save your time and efforts in entering the quantities. QuickBooks inventory management provides you with better insights into your business, and you exactly know what is selling and what you need to reorder. In this article, we will discuss some important aspects of QuickBooks inventory management in an intelligible manner.
What Is QuickBooks Inventory Adjustment Account?
When you proceed further with the QuickBooks adjustment, you need to set up QuickBooks inventory adjustment account to manage your inventory values. In the chart of accounts, you can set up a dedicated account to track your inventory adjustments. To set up your inventory adjustment account in QuickBooks, follow the below-given steps:
Step 1: Decide What You Want to Adjust
When getting started with the QuickBooks inventory adjustment, you need to decide what you need to adjust in the first place:
Adjust Quantity on Hand:
An efficient inventory adjustment involves the practice of the regular updates for the quantity on hand, not only due to the sales or purchase of the products but breaking down of an item can alter the inventory count. In this situation, you will need to perform QuickBooks inventory adjustments.
Adjust Total Value:
The product’s total value is calculated by multiplying the average cost of the product by its quantity in the stock. Seasonal damage or spoilage may alter this value.
Step 2: Set Up QuickBooks Inventory Adjustment Account
In the next step, you need to create a dedicated account in your chart of accountants so that you can track your adjustments. Follow the below-given steps:
- In QuickBooks, select Company and then further select Chart of Accounts.
- Now using the Account drop-down list, select New.
- Next, in the Other Account Types drop-down menu, select Cost of Goods Sold.
- Give this account with a name, “Inventory Adjustments” and then click Save and Close.
QuickBooks inventory adjustment account can help you to manage your business efficiently let you know where your business stands.
What Is QuickBooks Inventory Adjustment Journal Entry?
The inventory losses in the QuickBooks application can give rise to various discrepancies in your records. QuickBooks inventory adjustment journal entry helps you to prevent from these discrepancies so that you can make QuickBooks inventory adjustments fail-safely. Below are some main situations, when you may need to update your QuickBooks inventory adjustments in journal entries:
- To show modifications in the amount of inventory on hand as compared to the inventory remaining from the past year.
- When there is a change in the amount of inventory on hand from one accounting period to another.
These changes must be reported on the company’s income statement and balance sheet. To perform it, you need to make some specific entries in particular accounts. QuickBooks inventory adjustment journal entry is a daunting task, so you need to be very careful while performing it.
What Does the Term “QuickBooks Inventory Adjustment Cost of Goods Sold” Mean?
QuickBooks inventory adjustment cost of goods sold is an important term used in the QuickBooks inventory management system. When you set up the first inventory item, QuickBooks automatically adds two more accounts to the Chart of Accounts namely: Inventory Assets and Cost of Goods Sold. COGS inventory gets altered only when you sell inventory items on invoices or sales receipts. If you sell inventory that you do not possess, you can force your next bills to adjust the inventory asset and the COGS account. It plays a significant role in the efficient management of your QuickBooks inventory.
Need Additional Help?
This article helps users to get their queries on QuickBooks inventory adjustment resolved. However, if anything is not clear to you and you want to hear from an expert, give us a call on Our QuickBooks error helpline number. In no time, you will get relevant help from one of our dedicated professionals who will guide you with your QuickBooks inventory adjustment.
